Offshore loans turn cheaper as global investors widen exposure
syndicated loan route has turned cheaper for local corporates even before a much-awaited rate cut by the US Federal Reserve as global investors increase exposure to a widening borrower base using such instruments in India.
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In the first six months of the current calendar year, the volume of offshore syndicated loans raised by Indian firms excluding rupee transactions was at $13.3 billion versus $13.6 billion the same time a year ago, the LSEG Loan Connect data showed.
The LSEG data showed that HSBC was a bookrunner for offshore syndicated loans worth $1.4 billion in April-September, occupying the top position among banks.
The pricing of such loans has eased and is on average around 40-50 basis points lower than the rates paid by high-yield borrowers to raise funds through US dollar bonds and 10-15 basis points lower for investment-grade issuers, said Chetan Joshi, head of debt financing, HSBC India. One basis point is a hundredth of a percentage point.
The volumes in the first six months were steady on-year even as Reliance Industries — which along with its telecommunications arm had raised a massive $5 billion in offshore syndicated loans in April 2023 — has not tapped the market so far this year.
«In 2024, the offshore syndicated loan market has come of age, with robust volumes driven by a highly diversified borrower base across corporates,
